Tyco Electronics is fractionally lower today after reporting it would sell its electronics power systems unit to Gores Group LLC, a private-equity firm, for $100 million. The Power Systems division has been classified as a discontinued operation since TEL announced its plans to sell the business earlier this year. The deal is expected to close by the end of calendar-year 2007 or early 2008.
TEL has crested lower since its spin-off from Tyco earlier this year, but regained a foothold atop its 10-day moving average on September 26. However, some lackadaisical price action has sent the stock into a holding pattern, and the 37 level has provided some resistance during recent sessions. TEL is now poised to close the day below this short-term trendline.
Meanwhile, option traders are fairly sanguine about the equity's prospects. Its Schaeffer's put/call open interest ratio checks in at 0.40, as calls more than double puts among near-term options.